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Several provinces of Canada have started to regulate the payday loan industry in response to the federal legislation that transferred the jurisdictional responsibility for the control and licensing of payday loan companies to the territorial governments. Let us look into some of the details of the legislation in the provinces of British Columbia, Ontario, and Nova Scotia.

British Columbia's legislation on payday loans

The payday loan legislation in British Columbia is largely based on the Code of Best Business Practices of the Canadian Payday Loan Association (CPLA). The recommended effective annual interest rate is 60 percent for the first 13 weeks and 36 percent after that. The maximum allowable charge is $40 for every $100 borrowed.

Ontario's legislation on payday loans

In Ontario, the total cost of borrowing cannot exceed $21 per every $100 borrowed. Certain industry practices, such as the rollover of loans are banned. Borrowers are also given two days within which to cancel the loan without being penalized. The Ontario law also mandated the establishment of an Ontario Payday Lending Education Fund that will be funded by the loan companies.

Nova Scotia's legislation on payday loans

For Nova Scotia, the total cost of borrowing cannot surpass $31 for every $100 borrowed. The effective annual interest rate should not exceed 60 percent and the default fee cannot be more than $40. the Nova Scotia law also prohibits the loan companies from setting the due date before payday. They should also reveal of the fees and charges to the consumer even before he or she is required to submit personal information.

Failure to consider online payday loans

Unfortunately, the new laws did not consider the conditions when the loans are provided through the Internet.

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